Supreme Court allows taxpayers to take foreign tax credit for U.K. windfall profits tax

05/22/2013 | JournalofAccountancy.com

In a unanimous decision that resolved a split among the federal circuit courts of appeals, the U.S. Supreme Court held that the United Kingdom's windfall profits tax is a tax that is eligible for the foreign tax credit. Writing for the Court, Justice Clarence Thomas refused to adopt the U.K. government's characterization of the tax and instead held that the tax is an excess profits tax under Sec. 901 of the Internal Revenue Code.

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